HMO or House in Multiple Occupation is a residential property that is occupied by 3 or more tenants coming from various households. They share the entire house such as the kitchen and bathroom. There are large HMOs also that house 5 or more tenants. HMO property licence is a must for large HMOs in England and Wales. Nevertheless, in some locations, even small HMOs need a licence, so always check the requirements before investing in an HMO property in the UK.
Why are HMO properties in high demand in the UK?
High rental yields are one of the major reasons for the increased demand for HMO property investment in the UK. Another reason is the demand for affordable housing in the UK. HMOs attract students, workers or young people who are in need of temporary accommodation. As per statistics, the average age of tenants for HMO properties are 25-34. There is a major demand for HMO properties in the cities and town areas.
Self-managing an HMO property UK
If you are planning to manage an HMO Property on your own then here are some tips that our experts at Bullishbuys have curated for you. Read on:
- Conduct regular inspection
As an HMO landlord, if not monthly then at least every 3 months an inspection is a must.
- Be in regular communication with your tenants
Let your tenants know that they must reach out to you for even the tiniest maintenance problems before it pops out as an unmanageable issue.
- Have your service team ready
Be in contact with a few plumbers so that whenever the emergency arises you can have one at your service. Likewise, have some other service provider numbers such as gardener or electrician handy with you.
- Conduct frequent cleaning
Hire a cleaner to regularly clean all the common areas such as the toilets, kitchens, hallways and lounge.
Managing your tenants: Tips for self-managing HMO property UK
You as an HMO landlord are required to manage your tenants effectively. Your relationship with the existing tenants will be a deciding factor to attract future tenants. Here are some tips to keep in mind:
- Always go for professional and vetted tenants.
- Prepare a list of warnings and hand them over to the tenants along with the HMO tenancy agreement.
- Maintain good and open communication with your tenants.
- Cater for their needs as early as possible.
- If a problem arises, take the required actions swiftly. Try to reach a solution that seems the best to sort out the issues.
Note: Keep yourself abreast with the latest HMO management regulations here.
What are the risks involved in HMO property investment in the UK?
There are a few risks and hurdles that HMO landlords will have to face in this sector. Finding the right property is one among them. HMOs are best suited in Victorian properties as they come with larger rooms and multiple floors to accommodate 5 or more tenants easily. After investing in these types of properties though you may receive high rental yields, the maintenance costs are surely going to wash you out. You will also be required to have a maintenance team with cleaners and gardeners ready so that your property stays in its best condition to attract more tenants. Converting the existing home into HMO again is expensive. You need to rent an HMO property that is fully furnished which means the added burden of costs.
Another risk involved with HMO properties is when you sell them. HMO properties for sale are not a lucrative deal for all landlords. They remain the best choice for HMO landlords only.
Running an HMO property in the UK is not an easy task but certainly lucrative. With proper knowledge and prior planning, you certainly reap the benefits of investing in HMO properties.